According to the CEO of An Post, David McRedmond, more than half of the country’s 1100 post office’s are now loss making operations. Speaking on last nights episode of RTE’s Prime Time Mr McRedmond 265 of these are “near no discernible area of population.” While not confirming the actual amount of rural post office closures that are expected, the CEO stated that we would have to “get real” and make difficult decisions in the near future.
To many inhabitants of rural area these post offices are an essential part of life and they provide a multitude of vital services to their communities. A group of postmasters from the Irish Postmasters’ Union(IPU), which represents over 1,000 members, were protesting in An Taoiseach’s own constituency of Castlebar this week, with signs that read “The Taoiseach’s last act is to close rural Ireland.”
Speaking yesterday, the General Secretary of IPU, Ned O’Hara stated,“Communities want their Post Office to stay open and Postmasters will work to honour this. It cannot be left to An Post to make decisions on the future of communities in rural Ireland purely on the basis of its commercial mandate.”
Postmasters fear that the closures will devastate rural Ireland where post office’s are a vital lynchpin to smaller populations.
The potential impending closures are the latest in a series of blows to rural communications in recent years. Many banks, garda stations and public transport services have closed down leading to a feeling of isolation for a significant number of people.
Speaking to Prime Time, Mr McRedmond stated that 70% of Ireland’s population are within 14 km of five pot offices which is too large a number. Denis Naughten, the Minister for Communications, Climate Action and the Environment, however said that figure is largely due to the fact that “70% of the population live on 4% of the land mass.”
In another bid to make up for the losses An Post has encountered in the age on online banking, direct debits and the decline of traditional post, the company significantly increased postage prices in April 2017.
The standard domestic letter rate for items up to 100g within Ireland increased from €0.72c to €1.00 while the standard international letter rate up to 100g rose from €1.10 to €1.35.
According to An Post’s press release at the time “Increases of between 12% and 39% across the full range of mail services are necessary for An Post to continue to meet its Uni
versal Service Obligation.”
According to a report by Deutsche Post in April 2016 Ireland has the fourth highest postal prices in the EU, but at €1 it is ten cent below the EU average. As evident from the below data chart the average is largely skewed by Denmark and Italy’s postage rates.
The digital age poses a threat to the business model do many well established companies and An Post is no exception. Though the company has tried to diversify and adjust it still remains financially challenged and it’s predicted that it made a loss of between 12 and 15 million euro in 2016.
As the potential closures have received a huge backlash nationwide with protests taking place in the GPO last month, The Circular investigated how the significant increase in postage is affecting small and medium enterprises (SMEs).
We caught up with a small e-retailer at the post office in Mount Merrion, South Dublin, Gerry O’Brien, who depends on the postal service to deliver packages globally on a daily basis.
“As we send our packages through registered post the price increase is 18%. We pay €8.50 per package now as opposed to €7.20 before April. We receive on average 8-10 complaints from customers a week about the price of our postage. Our competitiveness on the global marketplace has significantly decreased as a result of the changes.”
Mr O’Brien informed us that in order not to lose the business of repeat customers they have started to delay posting until customers have bought a few items to save them the costs. This is necessary for them to retain the business of loyal customers but will lead to a decline in mail volumes for An Post. ” I see it as counter-productive for An Post to raise the prices so significantly as myself and others like me are forced to diversify and come up with more cost effective ways of doing business with our customers.”
David McRedmond has addressed this issue in An Post’s March press release on the issue.
“Where the impact is greatest – on higher volume users such as SMEs and larger businesses – An Post will do everything possible to mitigate the impact through improved volume discounts.”